The Tiwai Point Aluminium Smelter, owned by Rio Tinto and the Sumitomo Group, has decided to reduce its power consumption by 185 megawatts, which is about 4 per cent of the country's energy usage.
According to a report, the Tiwai Point Aluminium Smelter's decision is based on historically low hydro lake levels affecting Meridian Energy's power generation. Last week, Meridian Energy appealed to the smelter to cut power usage of 100 megawatts.
Meridian Energy's wholesale general manager, Chris Ewers, said the company issued the power usage cut notice to the Tiwai Point Smelter to help manage South Island hydro storage levels after recent low rainfall.
Meridian Energy has the right to ask the Tiwai smelter to reduce its power usage as part of a 20-year energy supply contract signed in May.
Tiwai smelter's chief executive Chris Blenkiron said, "I want to recognise the significant work ahead for the team at Tiwai who will now be asked to commence stopping and restarting one third of our operation, until April next year."
He added, "While winding back our operations is complex, the team at Tiwai understands the importance of playing our part as part of the wider electricity system to ease the stress the system is now under, from tight hydro and gas supplies."
Ewers said, "We said as part of that discussion all the way through the last two years that in order for them to have a long-term future in New Zealand, they need to be a bit more sympathetic to the needs of the electricity system."
He added, "So as the electricity system has a bit of a challenge, they come and support it through demand response and that's exactly what we're seeing."
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